Business this week

Moves at the top

Sony shook up its management by ditching several board members and naming Sir Howard Stringer, currently head of its American operations, as its new chairman and CEO. It is the first time a foreigner has headed the company. Sir Howard said the new team would “make tough decisions” in an ongoing restructuring that is designed to increase profit margins at the company's struggling consumer-electronics business.

British Airways confirmed that its current CEO, Rod Eddington, would retire later this year. BA's new boss will be Willie Walsh, the former head of Aer Lingus, an Irish airline. Mr Walsh carried out a programme of cost-cutting while repositioning Aer Lingus as a low-cost carrier.

Cathay Pacific said net income in 2004, at HK$4.42 billion ($567m), had more than tripled compared with 2003, when the Hong Kong-based airline was hit by travel concerns over SARS.

BAE Systems announced that it would buy United Defense Industries in a deal worth around $4 billion—the largest foreign takeover of an American defence company. BAE will reap a lucrative servicing contract for the Bradley combat vehicles, made by UDI and currently in use in Iraq.

EADS (the European Aeronautic Defence and Space company), reported a 60% increase in net income for 2004, to euro1 billion ($1.3 billion), on the back of strong sales at Airbus (of which it owns 80%).

Werner's woes

Shares in the London Stock Exchange fell by 10% after Deutsche Börse withdrew its preliminary takeover bid, valued at £5.30 ($10.00) a share. Strong opposition to the offer from several large Deutsche Börse shareholders forced a climbdown by the German exchange operator's CEO, Werner Seifert. Analysts pondered the potential for rival exchange Euronext to merge with the LSE, given that it might face similar opposition from its shareholders.

Several large investment banks, including Lehman Brothers, agreed to settle a lawsuit over bad advice given to investors in WorldCom. Bank of America recently agreed to pay $460.5m to settle its part in the suit.

The CEO of Riggs National Corporation resigned. Robert Allbritton's departure comes after recent investigations into Riggs Bank's handling of transactions with shady governments and a contentious deal to merge with PNC Financial Services Group.

Done bird

Shares in Martha Stewart Living Omnimedia fell by 18% as the company's eponymous founder was released from five months in jail. Shares in the lifestyle guru's company had been doing very well since last July, when Ms Stewart was sentenced.

Toys “R” Us received a buyout offer from an investment group. The deal, worth $5 billion, would keep the retailer as one unit. The company had planned to hive off its toy-retailing operation from its more profitable baby-goods stores.

Japan's Fair Trade Commission chided Intel for inducing five PC-makers to use its chips through a system of rebates. European Union regulators are also looking at the company's marketing strategy, which subsidises PC-makers in return for placing Intel's name on computers.

IBM received security clearance to go ahead with its $1.25 billion plan to sell its personal-computer business to Lenovo, China's biggest PC-maker.

Xstrata, a Swiss-based mining company, conceded defeat in its campaign to buy WMC Resources, an Australian mining company that owns access to 40% of the world's uranium.

Getting there

America recorded the biggest net gain in jobs since October; 262,000 more people were on the payrolls in February compared with January. Although payroll employment has bounced back since the start of a recession in the spring of 2001, unemployment registered a slight uptick—to a rate of 5.4%. Economists pondered if the recent job gains were enough to keep pace with rapid population growth, but wages remained subdued; average hourly earnings, at $15.90, were unchanged.